Unemployment Has Little Long-Term Effect on Mental Health

Losing a job can be a profoundly stressful experience, but the unemployed may be more resilient than previously believed, according to new analysis published by the American Psychological Association.

In fact, the vast majority eventually end up as satisfied with life as they were before they lost their jobs, the study found.

“Unemployment rates continue to be historically high in the United States and other countries,” said the study’s lead author, Isaac Galatzer-Levy, who is now at New York University School of Medicine. “There’s a real concern that this will have long-term implications on the mental well-being of a large portion of the work force. But this analysis suggests that people are able to cope with a job loss relatively well over time.”

“Previous analysis of this same data suggested that people never really returned to pre-unemployment levels of life satisfaction . Using a different analytical model, we are able to identify these distinct patterns that are more representative of people’s different responses to unemployment,” said Galatzer-Levy. “Our model suggests responses to unemployment do not represent a unified phenomenon as previously believed. In fact, most people cope well with this event and report few long-term effects on their overall well-being .”

The findings are quite similar to a pattern of resilience psychologists see across a wide range of stressful events, according to the study’s co-author, George Bonanno, a psychology professor at Columbia University. “We've looked at other traumatic events such as the death of a loved one, terrorist attack, traumatic injury, and we generally always see high proportions of resilience. This is one of the first studies to show that this same pattern relates to unemployment,” he said.

Furthermore, they found that broad economic patterns have a strong effect on people’s sense of well-being before —but not during — unemployment. Also, people seemed to be more negatively affected by regional unemployment rates than national unemployment rates.

“This suggests that people are more stressed-out when they fear losing their jobs than they are when they actually get laid off,” said Bonanno. “When massive job layoffs come closer to home and are observed in their communities, people are more likely to feel they are next and their well-being drops significantly as a result.”

Galatzer-Levy and his colleagues analyzed results of the German Socio-Economic Panel data study. This is a nationally representative survey of German households conducted yearly from 1984 to 2003. Their findings are published in the latest issue of the Journal of Neuroscience, Psychology and Economics.

Jeanette Mulvey

Jeanette has been writing about business for more than 20 years. She has written about every kind of entrepreneur from hardware store owners to fashion designers. Previously she was a manager of internal communications for Home Depot. Her journalism career began in local newspapers. She has a degree in American Studies from Rutgers University. Follow her on Twitter @jeanettebnd.